Americans have long been accustomed to reliable and (relatively) affordable electricity. We consume an immense amount of power annually – approximately 3.8 trillion kilowatt-hours (kwh) of electricity in 2020. The average delivered price for this power came to about 10.66 cents per kwh.
This price hasn’t significantly increased in recent years. In 2014, it was 10.44 cents per kwh, although individual households pay closer to 15 cents. Indeed, the United States has some of the lowest electricity prices on the planet among developed countries.
That said, electricity supplies aren’t always reliable. When we plug in the coffeepot or turn down the thermostat, we expect power. If we don’t get it, we try to find someone to blame.
A case in point came last February, when a series of failures in the Texas power grid left millions of the state’s residents freezing and in the dark for several days during the coldest weather in decades. And some of those who were able to keep the lights on soon discovered they were liable for electricity bills hundreds of times higher than what they usually paid.
What went wrong? As is typical in today’s hyper-politicized environment, the blame game began almost as soon as the power went out. Conservatives blamed liberals for an over-reliance on renewable energy. They pointed to the fact that nearly half of the state’s wind energy power capacity went offline during the deep freeze. In a Fox news interview, Texas Governor Greg Abbott blamed wind and solar for the shutdown. Agriculture Commissioner Sid Miller went even further, posting a message on Facebook stating, “We should never build another wind turbine in Texas. The experiment failed big time.”
Meanwhile, liberals blamed conservatives for partially deregulating the Texas energy market. Austin Mayor Steve Adler told NBC’s Today show that, “We have a deregulated power system in the state, and it does not work, because it does not build in the incentives in order to protect people and that has to change.”
But why did the power grid fail in Texas? And what lessons does that failure pose for the future?
One core issue: Texas electricity providers are paid only for the power they generate and face no penalties if they can’t deliver it during an emergency. No incentives exist for producers to invest in a resilient energy grid.
In addition, in an effort to avoid federal electricity regulation, most of the Texas energy grid is deliberately isolated from the rest of the country. Unlike most other states, when Texas experiences electricity shortages, it can’t import power from other states.
Are renewables to blame? Not really. According to the agency operating the state’s power grid, failures in natural gas, coal and nuclear energy systems were responsible for nearly twice as many outages as frozen wind turbines and solar panels. “It was across the board,” according to Bill Magness, the president and CEO of ERCOT, or the Electric Reliability Council of Texas. “We saw coal plants, gas plants, wind, solar, just all sorts of our resources trip off and not be able to perform.”
And those astronomical power bills? Some Texas utilities offer their customers variable rate plans with bills based on prevailing wholesale prices. But wholesale prices rose to a state-imposed maximum of $9 per kwh – nearly 100 times the national average price for electricity – for five days in a row in February. Businesses and residents on these variable rate plans found themselves liable for bills of thousands of dollars for just a few days’ use.
Three months after the Texas blackouts, the left-right sniping continues in the state’s legislature. Common-sense reforms like giving incentives to power producers to build resilient systems or allowing the state to import electricity appear unlikely to become law. We predict that when the dust settles, very little will change.
Where does that leave you if you live in Texas, or any other state? It means that with so many other aspects of American life, you can’t trust politicians or anyone else to safeguard your electricity supply. Instead, you must rely on yourself.
First, buy a standby generator with enough capacity to power essential circuits in your home. Next, take advantage of the generous federal and state incentives on renewable energy by installing solar collectors and a wind generator. Invest in robust battery backup systems for those days when the wind doesn’t blow, and the sun doesn’t shine. If you live an area where you even occasionally experience below-freezing temperatures, invest in de-icing technology for your wind turbine. And if you remain connected to the power grid, make sure you’re not on a variable price plan tied to the wholesale price of electricity.
With these precautions in mind, the next time a Texas-size power outage affects the area you live in for an extended period, you’ll be assured of having what nearly every other American assumes is their birthright – cheap and reliable electricity.